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Dominant platforms such as Booking.com and Amazon often impose Price Parity Clauses to prevent sellers from charging lower prices on alternative sales channels. We provide quasi-experimental evidence on the full removal of these price restrictions in France in 2015 for three major international hotel groups. Our analysis reveals a limited and non-significant effect on room prices. The external validity of this finding is established by focusing on similar policy interventions in Germany in 2016 and Austria in 2017. Our results imply that the prohibitions of Price Parity Clauses turned out to be ineffective in sizeably reducing final prices for consumers.

This document presents the contributions discussed at the second institutional workshop on Artificial Intelligence (AI), organized by the Joint Research Centre (JRC) of the European Commission. This workshop was held on 05th July 2019 at the premises of the JRC in Ispra (Italy), with video-conference to all JRC's sites. The workshop aimed to gather JRC specialists on AI and Big Data and share their experience, identify opportunities for meeting EC demands on AI, and explore synergies among the different JRC's working groups on AI. In comparison with the first event, according to the JRC Director General Vladimír Šuchav, the activities and results presented in this second workshop demonstrated a significant development of AI research and applications by JRC in different policy areas. He suggested to think about replicating the event at the premises of diverse policy DGs in order to present and discuss the clear opportunities created by JRC activities. After the opening speech by the JRC Director General Vladimír Šuchav, the research and innovation presentation were anticipated by two presentations by Alessandro Annoni and Stefano Nativi. The first presentation dealt with the results of one year of AI@JRC and six months of fully operational AI&BD community of practice1. The second presentation reported the results of the AI competences survey at JRC. The research and innovation contributions consisted in flash presentations (5 minutes) covering a wide range of areas. This report is structured according to the diverse domain areas addressed by the presenters. While the first part of the workshop was mainly informative, in the second part we collectively discussed about how to move on and evolve the AI&BD community of practice., JRC.B.6-Digital Economy

This paper presents a legal and economic analysis of business-to-business (B2B) data markets. It starts from the economic characteristics of data and explores to what extent private B2B data markets result in a socially optimal degree of data sharing, or whether there are market failures in data markets that might justify public policy intervention. It examines the conditions under which monopolistic data market failures may occur. It contrasts these welfare losses with the welfare gains from economies of scope in data aggregation in large pools. It also discusses other potential sources of B2B data market failures due to negative externalities, risks and transaction costs and asymmetric information situations. In a next step, the paper explores solutions to overcome these market failures. Private third-party data intermediaries may be in a position to overcome market failures due to high transactions costs and risks. They can aggregate data in large pools to harvest the benefits of economies of scale and scope in data. Where third-party intervention fails, regulators can step in, with ex-post competition instruments and with ex-ante regulation. The latter includes data portability rights for personal data and mandatory data access rights.

Data and information are fundamental pieces for effective evidence-based policy making and provision of public services. In recent years, some private firms have been collecting large amounts of data, which, were they available to governments, could greatly improve their capacity to take better policy decisions and to increase social welfare. Business-to-Government (B2G) data sharing can result in substantial benefits for society. It can save costs to governments by allowing them to benefit from the use of data collected by businesses without having to collect the same data again. Moreover, it can support the production of new and innovative outputs based on the shared data by different users. Finally, the data available to government may give only an incomplete or even biased picture, while aggregating complementary datasets shared by different parties (including businesses) may result in improved policies with strong social welfare benefits. The examples assembled by the High Level Expert Group on B2G data sharing show that most of the current B2G data transactions remain one-off experimental pilot projects that do not seem to be sustainable over time. Overall, the volume of B2G operations still seems to be relatively small and clearly sub-optimal from a social welfare perspective. The market does not seem to scale compared to the economic potential for welfare gains in society. There are likely to be significant potential economic benefits from additional B2G data sharing operations. These could be enabled by measures that would seek to improve their governance conditions to contribute to increase the overall number of transactions. To design such measures, it is important to understand the nature of the current barriers for B2G data sharing operations. In this paper, we focus on the more important barriers from an economic perspective: (a) monopolistic data markets, (b) high transaction costs and perceived risks in data sharing and (c) a lack of incentives for private firms to contribute to the production of public benefits. The following reflections are mainly conceptual, since there is currently little quantitative empirical evidence on the different aspects of B2G transactions. Monopolistic data markets. Some firms -like big tech companies for instance- may be in a privileged position as the exclusive providers of the type of data that a public body seeks to access. This position enables the firms to charge a high price for the data beyond a reasonable rate of return on costs. While a monopolistic market is still a functioning market, the resulting price may lead to some governments not being able or willing to purchase the data and therefore may cause social welfare losses. Nonetheless, monopolistic pricing may still be justified from an innovation perspective: it strengthens incentives to invest in more and better data collection systems and thereby increases the supply of data in the long run. In some cases, the data seller may be in a position to price-discriminate between commercial buyers and a public body, charging a lower price to the latter since the data would not be used for commercial purposes. High transaction costs and perceived risks. An important barrier for data sharing comes from the ex-ante costs related to finding a suitable data sharing partner, negotiating a contractual arrangement, re-formatting and cleaning the data, among others. Potentially interested public bodies may not be aware of available datasets or may not be in a position to handle them or understand their advantages and disadvantages. There may also be ex-post risks related to uncertainties in the quality and/or usefulness of the data, the technical implementation of the data sharing deal, ensuring compliance with the agreed conditions, the risk of data leaks to unauthorized third-parties and exposure of personal and confidential data. Lack of incentives. Firms may be reluctant to share data with governments because it might have a negative impact on them. This could be due to suspicions that the data delivered might be used to implement market regulations and to enforce competition rules that could negatively affect firms' profits. Moreover, if firms share data with government under preferential conditions, they may have difficulties justifying the foregone profit to shareholders, since the benefits generated by better policies or public services fuelled by the private data will occur to society as a whole and are often difficult to express in monetary terms. Finally, firms might be afraid of entering into a competitive disadvantage if they provide data to public bodies - perhaps under preferential conditions - and their competitors do not. Several mechanisms could be designed to solve the barriers that may be holding back B2G data sharing initiatives. One would be to provide stronger incentives for the data supplier firm to engage in this type of transactions. These incentives can be direct, i.e., monetary, or indirect, i.e., reputational (e.g. as part of corporate social responsibility programmes). Another way would be to ascertain the data transfer by making the transaction mandatory, with a fair cost compensation. An intermediate way would be based on solutions that seek to facilitate voluntary B2G operations without mandating them, for example by reducing the transaction costs and perceived risks for the provider data supplier, e.g. by setting up trusted data intermediary platforms, or appropriate contractual provisions. A possible EU governance framework for B2G data sharing operations could cover these options.

The Report ‘Cybersecurity – Our Digital Anchor’ brings together research from different disciplinary fields of the Joint Research Centre (JRC), the European Commission's science and knowledge service. It provides multidimensional insights into the growth of cybersecurity over the last 40 years, identifying weaknesses in the current digital evolution and their impacts on European citizens and industry. The report also sets out the elements that potentially could be used to shape a brighter and more secure future for Europe’s digital society, taking into account the new cybersecurity challenges triggered by the COVID-19 crisis. According to some projections, cybercrime will cost the world EUR 5.5 trillion by the end of 2020, up from EUR 2.7 trillion in 2015, due in part to the exploitation of the COVID-19 pandemic by cyber criminals. This figure represents the largest transfer of economic wealth in history, more profitable than the global trade in all major illegal drugs combined, putting at risk incentives for innovation and investment. Furthermore, cyber threats have moved beyond cybercrime and have become a matter of national security. The report addresses relevant issues, including: - Critical infrastructures: today, digital technologies are at the heart of all our critical infrastructures. Hence, their cybersecurity is already – and will become increasingly – a matter of critical infrastructure protection (see the cases of Estonia and Ukraine). - Magnitude of impact: the number of citizens, organisations and businesses impacted simultaneously by a single attack can be huge. - Complexity and duration of attacks: attacks are becoming more and more complex, demonstrating attackers’ enhanced planning capabilities. Moreover, attacks are often only detected post-mortem . - Computational power: the spread of malware also able to infect mobile and Internet of Things (IoT) devices (as in the case of Mirai botnet), hugely increases the distributed computational power of the attacks (especially in the case of denial of services (DoS)). The same phenomenon makes the eradication of an attack much more difficult. - Societal aspects: cyber threats can have a potentially massive impact on society, up to the point of undermining the trust citizens have in digital services. As such services are intertwined with our daily life, any successful cybersecurity strategy must take into consideration the human and, more generally, societal aspects. This report shows how the evolution of cybersecurity has always been determined by a type of cause-and-effect trend: the rise in new digital technologies followed by the discovery of new vulnerabilities, for which new cybersecurity measures must be identified. However, the magnitude and impacts of today's cyber attacks are now so critical that the digital society must prepare itself before attacks happen. Cybersecurity resilience along with measures to deter attacks and new ways to avoid software vulnerabilities should be enhanced, developed and supported. The ‘leitmotiv’ of this report is the need for a paradigm shift in the way cybersecurity is designed and deployed, to make it more proactive and better linked to societal needs. Given that data flows and information are the lifeblood of today’s digital society, cybersecurity is essential for ensuring that digital services work safely and securely while simultaneously guaranteeing citizens’ privacy and data protection. Thus, cybersecurity is evolving from a technological ‘option’ to a societal must. From big data to hyperconnectivity, from edge computing to the IoT, to artificial intelligence (AI), quantum computing and blockchain technologies, the ‘nitty-gritty’ details of cybersecurity implementation will always remain field-specific due to specific sectoral constraints. This brings with it inherent risks of a digital society with heterogeneous and inconsistent levels of security. To counteract this, we argue for a coherent, cross-sectoral and cross-societal cybersecurity strategy which can be implemented across all layers of European society. This strategy should cover not only the technological aspects but also the societal dimensions of ‘behaving in a cyber-secure way’. Consequently, the report concludes by presenting a series of possible actions instrumental to building a European digital society secure by design., JRC.E.3-Cyber and Digital Citizens' Security

A perfect storm of new technologies and new business models is transforming not only our vehicles, but everything about how we get around, and how we live our lives. The JRC report “The future of road transport - Implications of automated, connected, low-carbon and shared mobility” looks at some main enablers of the transformation of road transport, such as data governance, infrastructures, communication technologies and cybersecurity, and legislation. It discusses the potential impacts on the economy, employment and skills, energy use and emissions, the sustainability of raw materials, democracy, privacy and social fairness, as well as on the urban context. It shows how the massive changes on the horizon represent an opportunity to move towards a transport system that is more efficient, safer, less polluting and more accessible to larger parts of society than the current one centred on car ownership. However, new transport technologies, on their own, won't spontaneously make our lives better without upgrading our transport systems and policies to the 21st century. The improvement of governance and the development of innovative mobility solutions will be crucial to ensure that the future of transport is cleaner and more equitable than its car-centred present., JRC.C.4-Sustainable Transport

A perfect storm of new technologies and new business models is transforming not only our vehicles, but everything about how we get around, and how we live our lives. The JRC report "The future of road transport - Implications of automated, connected, low-carbon and shared mobility" looks at some main enablers of the transformation of road transport, such as data governance, infrastructures, communication technologies and cybersecurity, and legislation. It discusses the potential impacts on the economy, employment and skills, energy use and emissions, the sustainability of raw materials, democracy, privacy and social fairness, as well as on the urban context. It shows how the massive changes on the horizon represent an opportunity to move towards a transport system that is more efficient, safer, less polluting and more accessible to larger parts of society than the current one centred on car ownership. However, new transport technologies, on their own, won't spontaneously make our lives better without upgrading our transport systems and policies to the 21st century. The improvement of governance and the development of innovative mobility solutions will be crucial to ensure that the future of transport is cleaner and more equitable than its car-centred present.

This report provides an analysis of digital transformation (DT) in a selection of policy areas covering transport, construction, energy, and digital government and public administration. DT refers in the report to the profound changes that are taking place in all sectors of the economy and society as a result of the uptake and integration of digital technologies in every aspect of human life. Digital technologies are having increasing impacts on the way of living, of working, on communication, and on social interaction of a growing share of the population. DT is expected to be a strategic policy area for a number of years to come and there is an urgent need to be able to identify and address current and future challenges for the economy and society, evaluating impact and identifying areas requiring policy intervention. Because of the very wide range of interrelated domains to be considered when analysing DT, a multidisciplinary approach was adopted to produce this report, involving experts from different domains. For each of the four sectors that are covered, the report presents an overview of DT, DT enablers and barriers, its economic and social impacts, and concludes with the way forward for policy and future research., JRC.B.6-Digital Economy

This document presents the contributions presented at the first internal workshop on Artificial Intelligence (AI), organized by the Joint Research Centre (JRC) of the European Commission. This workshop was held on 23rd May at the premises of the JRC in Ispra (Italy), with video-conference to all JRC's sites. The workshop aimed to gather JRC specialists on AI to share their experience, to identify opportunities for meeting the EC demands on AI, and explore synergies among different JRC's working groups on AI. The full-day session workshop was organized around three main topical strands entitled Policy support, New Initiatives and Technology Development. Contributions covered a wide range of areas, including applications of AI to Cybersecurity, Transport, Environment, Health and other specific issues. This report is structured according to those main topics of study. According to the JRC Director General Vladimír Šucha: "The workshop was very stimulating and interesting presenting a broad spectrum of activities and competencies across JRC. It gave a great opportunity to build a strong and hopefully useful position in the field of AI/ML". While the first part of the workshop was mainly informative, in the second part we collectively discussed about JRC priorities and the set-up of a Community of Practice (now available at https://webgate.ec.europa.eu/connected/groups/community-of-practice-ai-and-big-data) dealing with AI and Big Data. Finally, the preliminary results of the online survey were presented. All colleagues were excellent in communicating their scientific activity in a flash and efficient way., JRC.B.6-Digital Economy

This paper adds to the empirical literature on the relationships between R&D, innovation and productivity at the firm level. The focus is on Spanish enterprises in Information industries, which are acknowledged to be at the forefront for both innovative activity and R&D performance. The analysis is performed on ca. 1800 enterprises included in the PITEC database (the Spanish source of the EU Community Innovation Survey) for the period 2004-2013. Using a three-stage "CDM" model we consider: (i) factors affecting the decision to conduct R&D, including the role of perceived importance of innovation on firm's R&D performance, (ii) the impact of the predicted R&D effort on companies' effective undertaking of product, process, organisational and marketing innovations, as well as their simultaneous occurrence and (iii) whether and to what extent such innovations boost productivity. In the specific context of this R&D intensive array of industries, the decision of undertaking R&D appears to be strongly influenced by the importance attributed to enhancing existing products or creating new ones, as well as by the size of the company, the fact of being young and local, and the availability public funding. These elements also greatly impact on enterprises' R&D effort, thus providing some arguments in favour of R&D promotion policies, in particularly addressed to start-ups. Expected R&D performance, in turn, appears to be strongly related to the actual achievement of such innovations, including non-technical ones. By focusing on innovation patterns, it was possible to ascertain a strong complementarity between different families of innovation (as expected, given these industries' specificities), as well as to qualify existing evidence on the innovation-productivity conundrum. Indeed, we show that results depend on the way innovation types are modelled and combined. Controlling for complementarities, enterprises performing focused non-technical innovations and joint technical and non-technical ones (mixed-mode innovators) are likely to be more productive (in terms of sales per capita) than their peers, while stand-alone technical innovations give inconclusive results., JRC.B.4-Human Capital and Employment

The study explores how European SMEs applying to the SME Instrument (SMEi) funding scheme under Horizon 2020 innovate use the digital platform business model. The study demonstrates a widespread awareness of the digital platform concept as a tool to be applied to gain momentum and growth, taking advantage of the digital affordances. The main challenges to scale-up include how to manage external communities and orchestrate them in order to build innovation ecosystems; how to find a profitable business model; and secure funding for growth. Firms located in peripheral regions face additional difficulties in finding complementary resources., JRC.B.6-Digital Economy

This paper adds to the empirical literature on the relationships between R&D, innovation and productivity at the firm level. The focus is on Spanish enterprises in information industries, which are acknowledged to be at the forefront for both innovative activity and R&D performance.